THE pension plans of millions of Britons were dealt a devastating new blow yesterday when the deepening eurozone crisis triggered meltdown on global stock markets.

The FTSE 100 Index plunged by more than 117.9 points yesterday to 5533.8 []

Around £29billion was wiped off the value of shares on London’s FTSE 100 Index after Spanish government borrowing costs reached a new high, suggesting the country will need a huge new bailout.

Leading economists warned that Europe was “sleepwalking toward a disaster of incalculable proportions” as a result of the “thoroughly broken” single-currency system.

The FTSE 100 Index plunged by more than 117.9 points yesterday to 5533.8, a fall of 2.1 per cent. Spain’s main share index fell by five per cent and the German Dax was down three per cent.

The collapse wiped billions of pounds from the share values of leading companies with a catastrophic impact on retirement pots and savings. Almost all pension schemes are geared at least in part to the value of leading shares.

We continue to think that the Spanish government is on borrowed time too

The cause of yesterday’s collapse in share values was the rise in yield on 10-year Spanish government bonds, a key indicator of creditworthiness, which hit a record 7.56 per cent before falling back to 7.43 per cent last night.

Yields above seven per cent make it almost impossible for Spain to borrow and spell a near-certain need for an EU or International Monetary Fund bailout.

The rise in yields followed pleas for financial assistance to the Madrid central government from Spain’s regional administrations in Valencia and Murcia. Other local administrations are also running out of cash and expected to plead for help.

John Higgins, of Capital Economics, said: “It is worth recalling that a decisive breach of the seven per cent sovereign bond yield level was followed by full-blown bailouts in Greece, Ireland and Portugal.

“We continue to think that the Spanish government is on borrowed time too.”

A group of leading international experts urged EU leaders to get a grip on the crisis to stop “incalculable economic losses and human ­suffering”.

The New York-based Institute for New Economic Thinking said: “The sense of a never-ending crisis, with one domino falling after another, must be reversed.

“The last domino, Spain, is days away from a liquidity crisis, according to its own finance minister. This dramatic situation is the result of a eurozone system which is thoroughly broken.”

In Britain, the deepening crisis sparked renewed calls for the break-up of the euro. Tory MP Douglas Carswell said: “The European political elite have been trying to defy the laws of mathematics.

“The sooner we get a break-up of the euro the better, both for us and for the millions of Spanish people who need a return to prosperity.” Ukip leader Nigel Farage said: “No doubt this is going to mean another IMF bailout and more money from UK tax­payers.”

Spain’s financial regulator yesterday imposed a three-month ban on short-selling – speculating on share prices falling. It followed concerns that borrowing costs could spiral further out of control.

Spanish finance minister Luis de Guindos insisted his country could survive without a massive bailout. But his claims failed to reassure investors, with the euro hitting a new two-year low against the dollar.

Justin Harper, of IG Markets, said: “The fear now is that, given its debt woes, Spain may eventually need a bail-out from the IMF or the eurozone’s rescue fund. That is driving investors away from the euro to other relatively safer-haven assets.”

Last night anxiety was also growing over the Greek economy.

Officials from the IMF, the European Commission and the European Central Bank, meeting in Athens, said the next instalment of bailout funds could be delayed until September following fresh concerns. An IMF spokesman called on Greece to get “back on track”.